Buy-to-let investors will need 50pc deposit - or no mortgage

Thrugelmir

chucknorris wrote: »

This is getting ridiculous, who the hell is going to invest in rental property (I wasn't going to anyway):

Buy for cash.

Wasn't so long ago that this was actually the norm (1998).

lisyloo

Regarding upward pressure on rents? Is it not finite?
Won't people look at other options - for example moving to a northern hell hole (seems to be the term of the moment).

cells

lisyloo wrote: »

Regarding upward pressure on rents? Is it not finite?
Won't people look at other options - for example moving to a northern hell hole (seems to be the term of the moment).

There always is a balance of choices. But with the population growing faster than the housing infrastructure and transport infrastructure I think the premium to live closer to work (rents or buying) is going to grow slowly over time as it has been doing for the last twenty years in London.

PasturesNew

chucknorris wrote: »

This is getting ridiculous, who the hell is going to invest in rental property (I wasn't going to anyway):

It's how it used to be pre-1997 or so. If you wanted to BTL back then your tenants had proper rights (not short ASTs) and you needed to put down about 40% or so and get a proper commercial loan.

After all, it is "a business".

ASTs coming out enabled somebody to spot that lenders could "get the tenants out quickly if there were a repo" which wasn't the case before. Before some lenders would be stuck with tenants they couldn't issue notices to, so were loathe to repossess, so were loathe to lend without a huge investment from the landlord.

chucknorris

PasturesNew wrote: »

It's how it used to be pre-1997 or so. If you wanted to BTL back then your tenants had proper rights (not short ASTs) and you needed to put down about 40% or so and get a proper commercial loan.

After all, it is "a business".

ASTs coming out enabled somebody to spot that lenders could "get the tenants out quickly if there were a repo" which wasn't the case before. Before some lenders would be stuck with tenants they couldn't issue notices to, so were loathe to repossess, so were loathe to lend without a huge investment from the landlord.

Sorry but that just isn't true I was issuing AST's myself in 1991, they came out of the 1988 Housing Act.

I wish that you would explain to the inland revenue that its a business! I'd love to get roll over and retirement relief for capital gains tax.

HappyMJ

Graham_Devon wrote: »

Rents, outside London (and within to some extent) are pretty much capped by housing benefit caps.

Remove housing benefit and the whole BTL scene would implode on itself overnight. So we can't really ignore the HB subsidy and its limits when it comes to vague assumptions that rent will always go up.

Rent will only go up where tenants can pay it.

In 4.7m individuals cases, housing benefit pays a portion or all of the rent. You are very limited in how much rents can go up in these 4.7m cases without simply losing a tenant and having to find someone else, privately who can pay the increased rent.

Rents did not fall when housing benefit changed from paying the rent on 50% of properties in an area to paying just enough to afford 30% of properties in an area. Personally, at least, I never saw any drop in rental prices. Housing benefits tenants either pay the difference between levels of rent and housing benefit or move somewhere cheaper and within housing benefit limits to avoid paying a top-up.

The rent on the house I own is higher than housing benefit. £600 rent due and maximum of £535 HB payable.

The rent I pay on the flat I rent is also higher than housing benefit £475 rent and maximum of £448.75 HB payable. Having no children living with me though I would only be eligible for the 1 bedroom rate of LHA and that's only £353.50 a month. One bedroom flats coming on to market are very rare and snapped up very quickly. Most of the occupants of the block of flats that I live in do not have children. In the block of 60 two bedroom flats I've only seen a few tenants that actually have children in the 6 months I've lived here so I would assume most people in these blocks of flats do work to afford the rent. Single tenants trying to find £121.50 a month from £316.80 of monthly JSA would find it near on impossible to survive on the remainder of £195.30 per month or £45 per week. These flats are in quite high demand and I don't think that changing/lowering housing benefit limits would make a landlord reduce the rent charged on them.

chucknorris

Graham_Devon wrote: »

http://www.property118.com/spending-review-2015-3-increase-on-stamp-duty-for-btl-and-second-homes/82625/

Theres loads, but that's a good start.

Im not impressed, I started a new thread and got this emailed to me:

Dear Chuck Norris

Thank you for submitting your suggested article/discussion. I will take a proper look over the next day or so and get back to you with any questions and/or suggestions I may have.

Is 07976 ******* the best number to reach you on or would you prefer me to contact you by email?

Did you make a donation to help fund the running costs of the forum? Please note that we are funded by Donations.

Unlike other forums we are also a Google News Publisher which means that we have to check all articles before they are posted to ensure they comply with Google rules. We also add some special code including pictures etc. and we may need to contact you before publishing if we require further information. This can take up to 48 hours so please bear with us. Sadly Google don't pay is any money for what we do so we need to rely on donations.

We don't publish all articles and we may need to make amendments - please see .....

wotsthat

Graham_Devon wrote: »

I've made the mistake of looking on Property118 in recent times. The greed there is literally astounding.

Property118 represents the average landlord in much the same way HPC represents the average house hunter.

chucknorris

wotsthat wrote: »

Property118 represents the average landlord in much the same way HPC represents the average house hunter.

That's my impression too, the thread I started was asking if others also thought that London house prices might dip, due to the recent budget/autumn statement announcements, I don't think that they will publish it.

mystic_trev

chucknorris wrote: »

That's my impression too, the thread I started was asking if others also thought that London house prices might dip, due to the recent budget/autumn statement announcements, I don't think that they will publish it.

I haven't been a Landlord as long as you, but Properties been included as part of my Investment strategy for the last 20 years.

If I was starting out today, I'd be giving BTL miss. I think even if I'd been buying in the last 5 years and had large mortgages on the Properties, I'd probably be selling up.

Some of the media are reporting there could be a rush of BTL Investors buying up Property before the increase in Stamp duty,pushing up prices even further! I've got a nasty whiff of 1988 all over again.

1988 Budget, when Nigel Lawson ended the option to pool allowances from August 1988. Lawson later publicly expressed regret at not having implemented the change with effect from the time of the budget, as it is generally accepted that the rush to beat the deadline fuelled a sharp increase in house prices.

.....and what happened after that?